The
appellant herein being aggrieved by and dissatisfied with the judgment and
order dated 29.4.2004 passed by a Division Bench of the Punjab and Haryana High Court at Chandigarh in Civil Writ Petition No. 4988 of
2002 affirming the award dated 22.11.2001 of the Labour Court, Gurdaspur is
before us. It is not in dispute that the Appellant herein is a statutory body
and being a local authority, governed by the Punjab Municipal Act. The terms
and conditions of service, including recruitment of its employees, are governed
by statutory rules.

The
respondent herein was appointed on 1.4.1994. He continued to work up to
31.7.1996. His services were terminated on 16.7.1997 by issuing a notice of
termination. Questioning the validity and legality thereof, an industrial
dispute was raised which culminated in a reference made by the appropriate
governments under Industrial Disputes Act (`the Act') in exercise of its power
under Section 10 (1)(c) thereof the following dispute to the Labour Court, Gurdaspur:

"Whether
termination of services of Shri Surinder Kumar, workman is justified and in
order? If not, to what/exact amount of compensation is he entitled?" A
plea was raised in the said proceedings on behalf of the appellant herein that
the respondent was appointed on a supervisory post and, thus, was not a
`workman' within the meaning of Section 2(S) of the Act. It is not in dispute
that the respondent was appointed on daily wages.

Before
the Labour Court, the appellant raised a plea that
the respondent was appointed on the post of Supervisor, on the recommendation
of one Shri R.S. Puri, M.L.A., Sujanpur and then a Minister in the Government
of Punjab.

The Labour Court by reason of the impugned award,
inter alia, held that although the second respondent was appointed with the
designation of a Supervisor and was expected to look after the development work
being carried out by the appellant and other construction works under the Nehru
Rojgar Yojana, he was merely discharging the duties of a workman. It was held
by the Labour Court that the respondent completed 240
days of work within a period of twelve months preceding his termination.

The Labour Court proceeded on the basis that the
workman having completed 240 days of work in a calendar year, it was the
bounden duty of the Appellant to produce the entire relevant records but the
same had not been done. It is not in dispute that the attendance records of
March 1994 and from April 1994 to February 1996 were produced but the
attendance registers from March 1996 onwards were not produced. It, however,
does not appear from the impugned award that the respondent had called for the
records from the office of the appellant.

The Labour
Court upon arriving at a finding that in terminating the services of the
respondent, the appellant had not complied with the statutory requirements
contained in Section 25F of the Industrial Disputes Act as no compensation had
been paid to him in terms thereof, the respondent shall be directed to be
reinstated in service with full back wages and allied benefits from the date of
termination i.e. July 1997 till actual reinstatement.

A writ
petition filed before the High Court by the appellant herein against the said
award was dismissed.

Before
the High Court, a specific plea was raised by the Appellant that the initial
appointment of the respondent was contrary to the recruitment rules. The High
Court's attention was further drawn to the fact that the respondent was
appointed in a Supervisory capacity to look after the construction work of the
MC building and other construction works under the Nehru Rojgar Yojana.

The
High Court, however, rejected the said contentions of the Appellant relying on
or on the basis of the findings of the Labour Court that the work for which the respondent was appointed had
been existing. It opined that its jurisdiction in the matter of issuing a writ
of certiorari is limited. It further refused to go into the question as regards
the payment of entire back wages stating that the appellant herein had neither
pleaded nor produced any evidence to show that the respondent was gainfully
employed after termination of his service.

The
High Court's jurisdiction to issue a writ of certiorari though is limited, a
writ of certiorari can be issued if there is an error of law apparent on the
face of the record. What would constitute an error of law is well known. In the
Judicial Review of Administrative Action, IVth edition p.136, S.A De Smith has
summed up the position:- "The concept of error of law includes the giving
of reasons that are bad in law or (if there is a duty to give reasons)
inconsistent, intelligible or, it would seem, substantially inadequate. It
includes also the application of a wrong legal test to the facts found, taking
irrelevant considerations into account and failing to take relevant
considerations into account, exercising a discretion on the basis of any other
incorrect legal principles, misdirection as to the burden of proof, and
wrongful admission or exclusion of evidence, as well as arriving at a
conclusion without any supporting evidence." [See also S.N. Chandrashekar
and Anr. v. State of Karnataka and Ors. 2006 (2) SCALE 248 and
Bombay Dyeing & Mfg. Co. Ltd. v. Bombay Environmental Action Group & Ors., 2006 (3) SCALE 1].

The Labour Court and the High Court also proceeded
wrongly on the premise that the burden of proof to establish non-completion of
240 days of work within a period of twelve months preceding the termination,
was on the management. The burden was on the workman. [See U.P. State Brassware
Corporation & Ors. v. Udit Narain Pandey, JT 2005 (10) SC 344 and State of M.P. v. Arjan Lal Rajak, (2006) 2 SCC 610].

Equally
well settled is the principle that the burden of proof, having regard to the
principles analogus to Section 106 of the Evidence Act that he was not
gainfully employed, was on the workman. [See Manager, Reserve Bank of India, Bangalore v. S. Mani & Ors., (2005) 5 SCC 100] It is also a trite
law that only because some documents have not been produced by the management,
an adverse inference would be drawn against the management. [See S. Mani
(supra)] Apart from the aforementioned error of law, in our considered opinion,
the Labour Court and consequently the High Court completely misdirected
themselves insofar as they failed to take into consideration that relief to be
granted in terms of Section 11A of the said Act being discretionary in nature,
a Labour Court was required to consider the facts of each case therefor. Only
because relief by way of reinstatement with full back wages would be lawful, it
would not mean that the same would be granted automatically.

For
the said purpose, the nature of the appointment, the purpose for which such
appointment had been made, the duration/tenure of work, the question whether
the post was a sanctioned one, being relevant facts, must be taken into
consideration.

It is
not disputed that the appointment of the respondent was not in a sanctioned
post. Being a 'State' within the meaning of Article 12 of the Constitution of
India, the Appellant for the purpose of recruiting its employees was bound to
follow the recruitment rules. Any recruitment made in violation of such rules
as also in violation of the constitutional scheme enshrined under Articles 14
and 16 of the Constitution of India would be void in law. [See M.V. Bijlani v. Union of India & Ors., (2006) 4 SCALE 147, State of Punjab v. Jagdip Singh & Ors., 1964
(4) SCR 964 and Secretary, State of Karnataka v. Uma Devi, 2006 (4) SCALE 197].

If a
post is not a sanctioned one, again, appointment therein would be illegal. In
M.P. Housing Board & Anr. v. Manoj Shrivastava [(2006) 2 SCC 702], this
Court stated the law in the following words:- "A person with a view to
obtain the status of a "permanent employee" must be appointed in
terms of the statutory rules. It is not the case of the respondent that he was
appointed against a vacant post which was duly sanctioned by the statutory
authority or his appointment was made upon following the statutory law
operating in the field.

The Labour Court unfortunately did not advert to the
said question and proceeded to pass its award on the premise that as the
respondent had worked for more than six months satisfactorily in terms of
clause 2(vi) of the Standard Standing Orders, he acquired the right of becoming
permanent. For arriving at the said conclusion, the Labour Court relief only upon the oral statement
made by the respondent.

It is
one thing to say that a person was appointed on an ad hoc basis or as a
daily-wager but it is another thing to say that he is appointed in a sanctioned
post which was lying vacant upon following the due procedure prescribed therefor.

It has
not been found by the Labour
Court that the
respondent was appointed by the appellant herein, which is "State"
within the meaning of Article 12 of the Constitution, upon compliance with the
constitutional requirements as also the provisions of the 1972 Act or the Rules
and Regulations framed thereunder." Yet again, in Haryana State
Agricultural Marketing Board v. Subhash Chand & Anr. [(2006) 2 SCC 794],
this Court held:- "In P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd Edn.,
Vol. 4 at p. 4470, the expression "status" has been defined as under:

"Status"
is a much discussed term which, according to the best modern expositions,
includes the sum total of a man's personal rights and duties (Salmond,
Jurisprudence 253, 257), or, to be verbally accurate, of his capacity for
rights and duties. (Holland, Jurisprudence 88) The status of a
person means his personal legal condition only so far as his personal rights
and burdens are concerned. Duggamma v. Ganeshayya, AIR at p.101 [Evidence Act
(1 of 1872), Section 41] In the language of jurisprudence `status' is a
condition of membership of a group of which powers and duties are exclusively
determined by law and not by agreement between the parties concerned. (Roshan Lal
Tandon v. Union of India).

The
word "privilege" has been defined, at p. 3733, as under:

`Privilege
is an exemption from some duty, burden, or attendance to which certain persons
are entitled; from a supposition of law, that the stations they fill, or the
offices they are engaged in, are such as require all their care; that
therefore, without this indulgence, it would be impracticable to execute such
offices, to that advantage which the public good requires.

A
right or immunity granted as a peculiar benefit; advantage or favour; a
peculiar or personal advantage or right, especially when enjoyed in derogation
of a common right.

* * *
Immunity from civil action may be described also as a privilege, because the
word `privilege' is sufficiently wide to include an immunity.

* * *
The word `privilege' has been defined as a particular and peculiar benefit or
advantage enjoyed by a person..

`Privileges'
are liberties and franchises granted to an offence, place, town or manor, by
the King's great charter, letters patent, or Act of Parliament.

In
view of the aforementioned definitions of the expressions "status"
and "privilege" it must be held that such "status" and
"privilege" must emanate from a statute. If legal right has been
derived by the respondent herein to continue in service in terms of the
provisions of the Act under which he is governed, then only, would the question
of depriving him of any status or privilege arise. Furthermore, it is not a
case where the respondent had worked for years. He has only worked, on his own
showing, for 356 days whereas according to the appellant he has worked only for
208 days. Therefore, the Fifth Schedule of the Industrial Disputes Act, 1947
has no application in the instant case. In view of the above, the dispensing
with of the engagement of the respondent cannot be said to be unwarranted in
law." [See also BHEL v. B.K. Vijay & Ors., (2006) 2 SCC 654].

In the
instant case, the respondent was appointed in violation of the rules. He was
appointed at the instance of a Member of the Legislative Assembly who was a
minister at the relevant time. No appointment could have been made at his
instance. No authority howsoever high may be cannot direct recruitment of
persons of his choice.

Having
regard to the factual circumstances of this case, we are of the opinion that
grant of monetary compensation would sub-serve the interests of justice.

We,
therefore, allow the appeal and set aside the directions of the Labour Court
and direct that in place of the respondent being reinstated with back wages,
the Appellant would pay monetary compensation to him, quantified at
Rs.50,000/-. We make no order as to costs.